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Adopted text

Feasibility of a 28th tax regime and its potential to support EU competitiveness

TA-10-2026-0270 · P10_TA(2026)0270 · PE785.418

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✦ In short · AI summary of this text, generated 4 Sept 2026

Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's resolution on the feasibility of a 28th tax regime supports the Commission's 'EU Inc.' proposal and calls for an optional, modular tax module to reduce compliance costs and boost competitiveness. It proposes a single consolidated corporate tax base, centralised VAT and withholding tax procedures, and mandatory EU employee stock options, while respecting Member States' tax rate competence. The regime must not weaken worker protections or enable tax avoidance, and should be reviewed every four years.

Key points

  1. Welcomes the Commission's legislative proposal on a 28th regime ('EU Inc.') and stresses it must not replace further efforts to reduce regulatory fragmentation.
  2. Calls for an ambitious 28th regime, including taxation, to allow SMEs, small mid-caps and innovative companies to scale up across the single market.
  3. Underlines that the regime must not enable circumvention of worker protections or weaken existing levels of protection.
  4. Supports a modular approach, with the tax module added to the corporate legal framework, covering the full life cycle of companies.
  5. Notes that tax policy remains subject to unanimity and suggests considering opt-in structures or enhanced cooperation, and qualified majority voting for certain tax aspects.
  6. Insists the regime must reduce compliance complexity and not create a parallel rulebook or additional administrative burden.
  7. Proposes a single consolidated corporate tax base for participating companies, with allocation by a pre-agreed formula, without limiting Member States' rate-setting discretion.
  8. Requires a centralised VAT framework with a single EU VAT number and digital One-Stop Shop portal.
  9. Calls for a common simplified withholding tax procedure and immediate recognition of tax residence via a centralised EU digital registry.
  10. Believes EU employee stock option scheme should be mandatory under the tax module, with gains treated as capital income.
  11. Calls for coordinated R&D tax incentives aligned with OECD Pillar Two, and temporary deductions for reinvested profits in R&D, digitalisation or green innovation.
  12. Calls for comprehensive review of tax aspects every four years, including adoption rates and competitiveness impact.

Who is affected

  • SMEs, small mid-caps, start-ups and scale-ups that opt into the 28th regime and its tax module.
  • Member States, which retain competence over tax rates but must recognise the regime and apply its rules.
  • Employees and key personnel in participating companies, benefiting from stock option schemes and tax certainty.
  • Investors, who would see harmonised capital gains treatment and standardised investment instruments.

Figures and deadlines

  • Administrative burden reduction estimated between EUR 328 million and 440 million over 10 years.
  • Review cycle should occur every four years.

Legal basis: Articles 4(2)(a), 5, 6(g), 50, 113, 114(1), 115, 116 and 225 of the Treaty on the Functioning of the European Union